Mosa Meat Archives - Labiotech.eu

Companies developing sustainable meat and dairy alternatives smashed records with a €2.6B ($3.1B) haul last year. Why has it been such a bumper harvest? Traditional agriculture is a major polluter, especially in the case of meat production. The highest estimations place its share of global greenhouse gas emissions at up to 20%. In an effort to meet growing demand for sustainability, many biotech companies aim to develop less resource-intensive sources of protein via fermentation, cell culture, and plant-based substitutes. In spite of the financial chaos resulting from the Covid-19 pandemic over the last 12 months, a staggering €2.6B ($3.1B) in funding went to companies in the meat and dairy alternatives sector, according to the nonprofit the Good Food Institute (GFI). This tripled 2019’s total. Developers of plant-based alternatives reaped the lion’s share with €1.8B ($2.1B); biotechs producing protein via fermentation took a neat €497M ($590M); and more than €303M ($360M) backed companies developing cultured meat. “Over the past year, the alternative protein industry has demonstrated not only resilience but acceleration, raising significantly more investment capital in 2020 than in prior years,” said Caroline Bushnell, GFI Director of Corporate Engagement, in a public statement. “The amount of capital that flowed into the alternative protein space in 2020 is pretty incredible,” echoed Nick Cooney, Founder and Managing Partner of the investment firm Lever VC. The heaviest hitters generally came from the US. One of the prime beneficiaries, Impossible Foods, bagged €589M ($700M) in two private rounds. The company genetically modifies yeast to give plant-based meat alternatives a realistic meat flavor. Other major players include Memphis Meats, which raised €135M ($161M) in one of the biggest ever rounds for a cultured meat company, and Perfect Day, whose €252M ($300M) Series C will bankroll the development of dairy ingredients grown via fermentation. Europe saw its own share of rising stars. In September, the Finnish startup Solar Foods raised an €18.5M Series A round to fund the development of a protein ingredient made by bacteria using just carbon dioxide, water, and nitrogen. In the Netherlands, Mosa Meats raised a €47M Series B round in October -- the biggest European private round in the cultured meat sector to date. The company closed the round at €71M last month. “In Europe, the investment rounds are still way smaller but they are growing along with the enthusiasm,” said Albrecht Wolfmeyer, International and National Head of the food startup incubator ProVeg. Cooney sees the growing maturity of companies in the sustainable food space as the main driver for the record haul. This is evident from colossal fundraises from late-stage companies including Impossible Foods, the Swedish plant-derived dairy product firm Oatly, and Memphis Meats. Another driver is mature companies in the space like Impossible Foods marketing their first meat and dairy alternatives. Last year, the US biotech Eat Just became the first to commercialize a cultured meat product in Singapore. “In my freezer, I have pints of ice cream from the grocery store that have real whey in them produced via fermentation, without the need for live animals -- the whey comes from US-based Perfect Day,” noted Cooney. It’s not just the mature companies partaking in the feast. A record number of fundraises across the board reveals that investors are also flocking to smaller startups. “There is an increasing number of companies, increasing product and technology diversity, and increasing geographic diversity in alternative protein, and that's attracting more and more early-stage investors as well,” said Cooney. The 2020 boom shows no signs of slowing in 2021. Amsterdam-based cultured meat biotech Meatable raised an impressive €40M in a Series A yesterday. The UK company Deep Branch recently closed its own €8M Series A to fund the production of animal feed from carbon dioxide using microbes. And more rounds have come from the likes of CellulaREvolution in the UK, Future Meat in Israel, Mirai Foods in Switzerland, and BlueNalu in the US. “We are seeing a transformation of the food system, and this is just the beginning. The record investments in 2020 in plant-based food tech, biotech, and cultivated innovations will be topped again this year,” said Wolfmeyer. “Family offices, institutional investors, more and more VCs -- often from the IT, biotech or pharma industry -- are entering the space, looking for sustainable high-growth investment opportunities.” Pasi Vainikka, co-founder and CEO of Solar Foods, likened the situation to the rise of the digital tech sector at the turn of the 21st century. The development of the first mobile devices “was basically laying the foundations for a new industrial sector in the global economy,” Vainikka explained. “I can see the same with food now.” What is most remarkable is that all of this progress comes in spite of the fact that the pandemic threatens economic recessions around the world. “Covid-19 didn't turn out to be as destructive to the food innovation and investment ecosystem as we first thought,” said Wolfmeyer. “Investors were not as reluctant as expected but mostly rather bullish.” “As food companies, they are all deemed ‘essential businesses’ so they never had to pause operations or stop going into the lab,” added Cooney. In fact, dramatic rises were seen in the sales of vegan and plant-based alternatives to meat and dairy products during the pandemic. This surge in demand even outweighed increasing sales of traditional meat and dairy products seen during the ‘hamster shopping’ season in spring 2020, said Cooney. What has also become clear in the last year is that startups making meat alternatives could also introduce more diversification and automation to protein production. This could prove instrumental during uncertain times like a pandemic. “We’ve also seen in the past six months governments working to move forward with further establishing the regulatory pathway for biotech-based alternative protein products, as a way to diversify the protein supply chain,” said Cooney. The huge Green Deal launched by the EU last year to foster sustainability could also benefit the development of biotechs producing meat alternatives. For example, a consortium led by the Spanish firm BioTech Foods was one of the first to receive funds from the project in October to develop cultured meat. One of the limitations of the ballooning meat and dairy alternatives sector is the strict stance of the European Commission on new foods, in addition to products containing genetically modified (GM) ingredients. Impossible Foods, for example, is currently recruiting experts to help the firm get past the regulatory hurdles of the EU. For some food biotech startups in Europe, though, this anti-GM environment is no hindrance. For example, Solar Foods doesn’t require the use of genetically modified organisms, since it uses a natural strain of bacteria found in soil. As the field is still very new, there are other major obstacles to overcome. One is that it’s difficult to produce meat and dairy alternatives efficiently on a big scale, particularly in the case of cultured meat. This means it will take time to make the technology as economical as traditional protein production. Another is the historically mixed public reception of ‘fake meat’. “Maybe it's for companies like ourselves now to prove new products are good enough so that they don't taste like in the past,” Vainikka said. “So it must taste good and be equal, or better than, what we have today. Then people will naturally go for it.” If companies in the sector can overcome these obstacles, they stand a real chance of gaining a foothold in food markets around the world. “Animal protein is a truly massive global category, one of the largest consumer categories, and this is the first time it's faced disruption from challengers,” said Cooney. “It creates an incredible amount of opportunities.” Images from Elena Resko and Solar Foods

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